Farmers have right to turn down gas companies: Macfarlane

Ian Macfarlane
jokes he would want to be out of the country if a gas company ever takes a farmer to the land court to try to force access for coal seam gas drilling.

According to the man planning on being the next Federal Resources Minister, there’s no way coal seam gas development should proceed without the support of the farmer. Any farmer should have the right, he insists, to just say no.

Macfarlane’s views – along with Gary Gray’s – are only part of the story, given that state governments have responsibility for land access.

But the passionate sentiment in the community demonstrates what a sensitive political issue coal seam gas will be for any government over the next few years.

That level of agitation only makes it more important to follow what is happening on the ground. Major gas companies like Santos, AGL, Origin and Queensland Gas all concur, for example, with the need to only explore or drill subject to the agreement of the farmer. But one man’s farm is another man’s neighbouring property. Even getting individual approvals doesn’t resolve continuing community angst about the potential impact of coal seam gas, especially on water.

That alarm is even more dramatic in areas of prime agricultural land such as the Liverpool Plains in NSW and the Darling Downs (where Macfarlane farms) in Queensland. Many farmers still believe the value of their properties will be damaged. Others doubt the science and industry assurances that the drilling is safely quarantined and will not harm the water supply. And, of course, any suggestion that drilling could occur near suburbs or towns is regarded as anathema by local resident groups.

Everyone blames the gas industry

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For a tiny if active minority, this fight is just part of the wider war against the use of fossil fuels. But most people are really only concerned about the prospect of visual or environmental degradation from what has become the latest environmental bogeyman. They mainly want certainty that this won’t happen or will be strictly limited in area or effect.

That leaves politicians – Liberal or Labor, federal or state – blaming the industry for only belatedly explaining their position to the community. They argue such initial neglect meant the debate has already been captured by “environmental extremists," compounded by a general lack of knowledge about coal seam gas. Not to mention the arcane workings of the national gas market.

The industry, for its part, feels let down by governments – especially in NSW. NSW Minister for Resources and Energy
Chris Hartcher
told the APPEA conference on Tuesday that there was no community faith in the state’s regulatory framework, especially given revelations about the Eddie Obeid version under the previous Labor Government. He said this was compounded by people feeling they were “being taken for a ride by certain companies".

This has become NSW’s rationale for dramatically slowing – if not effectively stopping – most coal seam gas development. The frustration of the gas companies – as well as of the Federal Liberal opposition – is rapidly increasing as they blame the NSW government for refusing to even acknowledge the practical results.

As Hartcher himself pointed out there are now 4000 CSG wells in Queensland and only 240 in NSW. His real problem is that the community doesn’t yet realise what that equation means for future gas supplies – and prices – in NSW.

Clock is counting down

These supplies are quickly running out of time. Contracts in a state that currently produces only 5 per cent of its own needs are expiring in the next few years. NSW will face a shortage of available gas, without paying much higher prices to get it, by 2016. Yet the O’Farrell government’s new restrictions will effectively make it impossible to produce new coal seam gas supplies to meet that tight deadline.

Hartcher’s political defence gave no explanation of plans to deal with this beyond saying the government is “working towards it." He has “high expectations the gas would be sourced", he declared, and expressed hope that Queensland and Victoria would assist. Think again.

Queensland is the new East Coast magnet for coal seam gas, especially from the Cooper Basin, to help feed its new LNG export plants now under construction.

More gas from Bass Strait is also unlikely to eventuate unless NSW agrees to significantly higher prices, probably including a larger, expensive pipeline.

And Queensland, even though now heavily reliant on coal seam gas, also needs to radically increase its own drilling if it is to meet export demand.

Macfarlane happily describes a gathering “tide" of approvals flowing in from western Queensland as more farmers accept the money, if only to revitalise their communities and improve their farms.

Even so, approvals will prove a lot tougher as prime Queensland agricultural land becomes more of a target.

Although not yet conceded, it is also probable that the companies are going to have to provide a lot more money and community support – as well as evidence – to sound persuasive to the majority.

APPEA chairman and Santos chief executive
David Knox
says that when it gets down to real people talking around the table, Santos never fails to get agreement from farmers – even though this may take time. Start the stopwatch.